"Unfortunately so much commentary is self-serving or sensationalist. Pete Wargent shines through with his clear, sober & dispassionate analysis of the housing market, which is so valuable. Pete drills into the facts & unlocks the details that others gloss over in their rush to get a headline. On housing Pete is a must read, must follow - he is one of the finest property analysts in Australia" - Stephen Koukoulas, MD of Market Economics, former Senior Economics Adviser to Prime Minister Gillard.

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"I've been investing for over 40 years & read nearly every investment book ever written yet I still learned new concepts in his books. Pete Wargent is one of Australia's finest young financial commentators." - Michael Yardney, Australia's leading property expert, Amazon #1 best-selling author.

"The most knowledgeable person on Aussie real estate markets - Pete's work is great, loads of good data and charts, the most comprehensive analyst I follow in Australia. If you follow Australia, follow Pete Wargent" - Jonathan Tepper, Variant Perception, Global Macroeconomic Research, and author of the New York Times bestsellers 'End Game' and 'Code Red'.

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Monday, 10 April 2017

Fever pitch

Melbourne homebuyers driving loans

After all the hysteria of the past week, it's a relief to be able to get back to some facts and figures.

Investor finance was somewhat softer in February at $12.9 billion, and this pre-dates the latest round of macro-prudential measures, which should put a few minds at rest.

The downturn in lending to investors was most marked for construction loans, another indicator that dwelling construction is about to drop (there is plenty of evidence in Brisbane of developers pulling up the ladder too, with the residual stock being shifted at heft discounts to retail prices).

Total housing finance also cooled a little in February to $32.9 billion in seasonally adjusted terms.

In trend terms, housing finance is at $33.5 billion, but further curbs on investor lending could slow the total over the months ahead.

A point well noted by Cameron Kusher of CoreLogic is that monthly total housing finance has increased from less than $20.5 billion in Q1 2012 to $33.5 billion today, so there is plenty of credit sloshing around the system.

The number of homebuyer commitments is in a gentle uptrend, while the total excluding refinancing has crept back up to its highest level since 2009.

The average loan size has eased since initial curbs on lending were introduced and tighter serviceability bites.

Around the traps

Around the states, Melbourne looks strongest in terms of the number of homebuyer commitments followed by Sydney, while Perth is still trending down.

In terms of the dollar value of homebuyer commitments, Melbourne looks super-strong.

I'll take a look at investor loans around the traps later in the week.

Overall, it was a slightly softer month for investor loans, so with a further crackdown on interest-only loans to come this should help to seem some heat taken out of the sector.